LinkedIn India and the individuals violated the Significant Beneficial Owner (SBO) norms under the Companies Act, 2013, as the Registrar of Companies ((NCT of Delhi & Haryana) said in a 63-page order.
Corporate Affairs Ministry Slapped A fine On LinkedIn India
It appears that the corporate affairs ministry slapped fines on Microsoft-owned LinkedIn India, Satya Nadella and eight other individuals on Wednesday.
This has happened for the violation of the significant beneficial owner norms under the companies law.
Here, Nadella holds the CEO position of Microsoft, he acquired the professional networking platform LinkedIn during December 2016.
LinkedIn India and the individuals violated the Significant Beneficial Owner (SBO) norms under the Companies Act, 2013, said the the Registrar of Companies ((NCT of Delhi & Haryana) in its 63-page order.
The RoC, which comes under the ministry, said, “… Satya Nadella and Ryan Roslansky are the SBOs in relation to the subject company and are liable to a penalty under section 90(10) of the Act, due to their failure to report as per section 90(1). Ryan Roslansky was appointed as the global CEO of LinkedIn Corporation on 1st June 2020 and started reporting to Satya Nadella,” in its order.
Basically, Section 90 of the Act pertains to SBO, which requires companies to disclose SBO details.
How Did This Happen?
It seems that the company and its officers are liable for action for the failure to take necessary steps to identify the SBO in relation to the company, as per the order.
Moving ahead the RoC has slapped penalties totalling Rs 27,10,800 on LinkedIn Technology Information Pvt Ltd or LinkedIn India, Nadella, LinkedIn CEO Ryan Roslansky and seven other individuals.
When it comes to the penalty, a penalty of Rs 7 lakh has been slapped on LinkedIn India for the violation of SBO norms.
Besides this the fines of Rs 2 lakh each have been imposed on Nadella and Roslansky, respectively.
Apart from this there are other individuals who have been fined include Keith Ranger Dolliver, Benjamin Owen Orndorff, Michelle Katty Leung, Lisa Emiko Sato, Ashutosh Gupta, Mark Leonard Nadres Legaspi and Henry Chining Fong.
According to RoC, “ the company and its officers failed to even send a notice [which was mandatorily required to be sent] as per rule 2A (2) of the Companies (Significant Beneficial Owners) Rules, 2018 leading to a contravention of section 90(5) for which penalty has been provided under section 450. All the officers, including the non-executive directors are liable for this violation due to the presumption of clear knowledge on part of each of such directors about the holding structure of the company.”
Coming to LinkedIn India, it has been set up as a subsidiary of Microsoft Group.
In its defense, LinkedIn India can file an appeal against the order with the Regional Director (NR) within 60 days from the date of receipt of this order.
